DelicacyDefi Rug Pull

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DelicacyDefi

The anonymous developers behind DelicacyDefi launched a new smart contract hot wallet, complete with an innovative new backdoor. Despite lacking an audit, it appears many added liquidity here. It appears that liquidity was withdrawn on April 27th. The website and social media appear to have been deleted.

This is a global/international case not involving a specific country.

About DelicacyDefi

The domain was registered on March 18th, 2021. "Let's goooooo! Come and taste our succulent pools and enjoy the juicy APR's. 1000 Tokens minted. 900 will be burned after 36 hours. Base project for many to come! No migrator code, timelock implemented and audit on the way!"

"We are very, very proud to present you with our upcoming project on BSC: Delicacy Defi! This will not be just another Pancakeswap clone or some random pump-and-dump-coin as we have big plans for the future."

"Our first project will be the DELI token. This will serve as our baseline, but we have already begun development on our next projects that will build further upon The DELI platform. We can’t give away too much at this time but it involves NFT’s, Borrowing and lending on a P2P scale and a very interesting automated, self-sustaining mechanism for applying deflationary pressure on our DELI token."

"The Technicals: Small marketcap: 1000 DELI tokens Have been issued. 100 of these will be used to provide liquidity when the farm will be lau[n]ched. The 900 remaining tokens will be locked in the farm for the duration of the timelock. Afterwards they are going to be burned."

"No Presale: Instead of doing a presale, We are going to incentivize everybody to provide liquidity for our token by rewarding them handsomely. For the first 36 hours (duration of timelock) the DELI/BNB pool is going to be the best rewarding pool. Once liquidity and price stability has been achieved, rewards will be balanced again."

"Security: Our contracts are forked over from Goose, so no migrator code! We also will be having a 36 hour timelock contract set in place. Audit is also being looked into. Fees: All pools except for the native pairs will have a fee of 4%. 1% is going to the team and the remaining 3% is going to be used for regular buybacks & burns. To help get the farms going we are going to discount all fees to 1%! Timing: We are launching very soon. Specific details and last minute updates will always be shared in our Telegram group, so be sure to join us over there!"

"So, let’s work up an appetite, prepare our tummy’s and be ready to taste those exquisite delicacies [and] juicy APR’s!"

"Looks like a rug- lpToken.Update(address(_owner))"

"We’ve received inbounds that may indicate high risks regarding a project named DelicacyDefi. Malicious code snippets appear in the smart contract and we wish the community DYOR with caution before interacting. @BinanceChain"

"The owner of the contract has the ability to approve (unlimited) the spending of the LP tokens deposited by users. It means at a certain stage (say after the farm started), the owner can call this function first to approve the spending, then another call to the LP token's transferFrom() to exploit the deposited LP tokens into its own pocket."

"It replaces the safeApprove() of the standard SafeBEP20 to Update() for the sake of misleading (approval for someone for doing something is always dangerous, isn't it!)." "Owner of DeliMaster can take away all the LPs."

"Be careful potential #RugPull. Check out warning by @certikorg related to #delicacydefi project."

"Update is to update all the pools! And yes we messed around a lot with the code. [A]s we s[t]ated in the [M]edium post we are looking to implement new functions like automatic block reward and peer to peer LP transfer. This is a little piece of code we left in, even by accident."

"This time we do it right. ALL new contract will be posted and published days before launch, allowing everybody to go over them as much as they want! No more FUD, no more mess. Clarity and security becoime our number 1 priorities!" "Again, thanks to everybody who is still believing in us. We will keep working hard to bring you a true decentralized gem!"

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

Known history of when and how the service was started.
What problems does the company or service claim to solve?
What marketing materials were used by the firm or business?
Audits performed, and excerpts that may have been included.
Business registration documents shown (fake or legitimate).
How were people recruited to participate?
Public warnings and announcements prior to the event.

Don't Include:

Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

When the service was actually started (if different than the "official story").
Who actually ran a service and their own personal history.
How the service was structured behind the scenes. (For example, there was no "trading bot".)
Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - DelicacyDefi Rug Pull
Date	Event	Description
April 27th, 2021 2:39:32 AM	First Event	This is an expanded description of what happened and the impact. If multiple lines are necessary, add them here.

Total Amount Lost

The total amount lost is unknown.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

It is unknown how much was recovered.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

Prevention Policies

Funds stored in smart contract hot wallets face many risks, especially when the wallet is controlled by an anonymous developer. For proper protection, uninsured funds should be stored in a multi-sig wallet with all keys stored offline and held by known and trained individuals. At least two seprate reviews of this setup should be conducted.